Tips for Small Business Owners: How to Win and Manage Federal Contracts

By Shelia Newman, MS, President

FALLS CHURCH, VA, June 13, 2014 - I was honored to speak at an event on June 3rd at the US Department of Agriculture (USDA), hosted by ChallengeHER, an initiative from the Small Business Administration (SBA), Women Impacting Public Policy (WIPP), and American Express OPEN (OPEN). I was asked to provide a group of women with practical advice on how to win and manage contracts with the Federal government and, generally, advance the Women-Owned Small Business Federal Contract Program.

I am fortunate to be considered a “successful” woman business owner and I am extremely proud of what our employees have accomplished. Our focus on providing the highest quality services to our clients is consistent with our “smart growth” strategy—we pursue new work in our fields of disability, health and social policy only when we know we have the talent and resources to achieve outstanding results on the new contracts.  Since 2002, New Editions’ revenue has grown an average of $1 million each year. 

I want to share with you here, the same tips for success I offered at the ChallengeHER event.

Leverage your experience. I suggested to the women who had not yet started a company to consider working for a Federal contractor before embarking on their own ventures. This would allow them to learn the contracting processes and regulations and provide an opportunity to develop relationships. I worked for three Federal contracting companies before I started New Editions.

For those who had already invested in their companies, but still haven’t found that first contract, I encouraged them to look for work in their areas of experience. I have a Master’s in rehabilitation counseling. I researched the agencies that contracted work in disability and health and watched for those agencies to release Request for Proposals (RFPs).

Have a vision for the company. From the beginning, I knew I wanted to create a company that accommodates women, workers with disabilities, older workers and workers with young families. I am proving that a company focused on balancing life and work for all employees - those with disabilities included - can be successful. As you grow and hire employees, make sure the new hires believe in that same vision.

Create a diverse workforce. What I do best is hire outstanding employees. I like to say that New Editions looks like every company in America should look, with a workforce representing the rich diversity of our country – made up of many different races, religions, ages, cultures and disabilities. More than 20 percent of New Editions’ employees are people with disabilities. I support the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) revision of Section 503 of the Rehabilitation Act. Every Federal contractor must now have a goal of hiring people with disabilities. Each contractor must aim for seven percent of their employees to be people with disabilities. I assured the attendees of ChallengeHER that this is a reasonable goal and reaching the goal will add to a diverse workforce and make a company stronger. 

Hire an outstanding financial officer who knows government cost accounting. A government contract needs an accountant with superior knowledge of indirect rate projections, job cost analysis, incurred cost submissions, provisional rate proposals, taxes, budgeting, cash flow, projection of future growth and revenue recognition. This person must have extensive knowledge of the Federal Acquisition Regulations and the Defense Contract Audit Agency regulations.

Use a bank that understands the nature of Federal contracting. Our bank understands the Federal regulations under which we operate. A bank that understands Federal contracting is less likely to place undue burdens on your business.

Consider outsourcing. While we do a lot of database, software, on-line training and website programming, we found it difficult to keep highly qualified IT people to maintain the computers and servers in our small company.  We now outsource those services, resulting in better, more reliable and secure servers and mail support than most small businesses can afford to maintain in-house.  Our servers have been approved for high security projects and our mail and websites are seldom down.

Evaluate each RFP carefully. Evaluate against capacity, capability and commitment. We ask: Are we stable enough with current contracts - performing well, fully staffed to where we have the capacity to pursue more work? Do we have previous experience to show strong enough past performance to win? Do we have staff members who want to do this work and are committed to the mission of the agency issuing the RFP?

If being the boss and making a lot of money are the reasons for starting a company, reconsider. You will always have clients as “bosses” and money needs to be invested in benefits and making your company a great place to work so that you can attract good employees. When employees are happy, they strive to make the clients happy and when clients are happy, they give good performance ratings, which are needed to win new work. It all starts with employees who love what they do and where they work. When I have to choose between something like having nicer offices versus providing excellent healthcare, having family picnics or benefits for the employees, I choose to try and make the employees happy. It’s paid off. We have a high retention rate and we were one of Washingtonian magazine’s 50 Great Places to Work this past year. And most importantly, our client ratings are excellent and we continue to grow our business.